the creation itself is absolutly not illegal,
what’s really matter is where the data you are generating with or replicating real world places came from .
for example and from memory SRTM data wich is the elevation or heighrmap data produces by NASA is OK to use, but you have to give credit to them .
openstreet map data is ok too with the same condition .
satellites images or aerial images is the main big big BIG problem :
it’s nearly impossible to find free or cheap images under 30m resultion, because it cost a looooot of money .
i am nearly sure that you can’t use google or bing images in your project (commercial or not) without permission
things may changed now, so if you find some good source of free or cheap images let me know 
i am interested for my old flight sim project 